On average 1998 was a positive year for third-party providers of investment products through banks, a survey found.

Two-thirds of the 21 firms surveyed by Kenneth Kehrer Associates of Princeton, N.J., reported increased sales. And those that primarily sell mutual funds and variable annuities had a particularly good year, said Kenneth Kehrer, principal of the consulting firm.

"They tended to have more updraft than firms that have traditionally sold a lot of fixed annuities," he said. Fixed annuity sales were off at 14 of the firms. Mutual fund and variable annuities sales, on the other hand, increased at 17 of the firms.

Third-party marketing firms provide investment products and brokerage services to banks that are too small to own a broker-dealer or that do not want to. Some also provide products and sales support to larger banks that run their own brokerages. Among the best-known firms are Invest Financial Corp., Independent Financial Marketing Group, and Essex Corp.

Though there are more than 100 third-party marketing firms, Mr. Kehrer contacts only those that he knows do significant business with banks. The financial information is provided by the firms.

Among those surveyed, Uvest Investment Services of Charlotte, N.C., had the largest increase in sales. Though it ranked only 15th, its sales spiked 119%, to $276 million.

Dan H. Arnold, Uvest's president and chief operating officer, partly attributes the increase to new clients. The firm, which serves 125 banking companies, added 31 last year.

Other firms that had particularly large sales growth last year were LPL Financial Services of San Diego and American Annuity Group Financial Institution Marketing of Cincinnati. Sales at both companies increased 44%.

"We're still a small player compared to some of the big third-party marketing groups across the company," said James T. McVey, a vice president of American Annuity.

But the firm, which serves about 100 banking companies, has more clients "in the hopper," Mr. McVey said, and plans to improve its technology.

The top seller of investment products was IFC Holdings Inc. of Tampa, which serves 424 banking companies through its subsidiaries Invest Financial and Investment Centers of America. Sales increased 24.8%, to $2.6 billion, the survey showed.

However, this is the first time Mr. Kehrer has lumped both firms together. Sales at Invest of Tampa were $2.09 billion, not including sales by a third-party marketer it bought in December. Investment Centers of Bismarck, N.D., sold $549.6 million of investment products.

Independent Financial, which has 78 banking companies, placed second. Sales for the Purchase, N.Y., firm, which is owned by Boston-based Liberty Financial Cos., increased 8.5%, to $2.5 billion.

New York-based Essex ranked third, with $2 billion of sales, though its total was off 34.6%.

Mr. Kehrer said Essex's sales were hurt by the loss of First Union Corp. of Charlotte, N.C., as a client. The banking company internalized its fixed annuities program in the beginning of 1998. Essex has about 100 banking company clients.

Meanwhile, Marketing One Inc. of Portland, Ore., which held the top slot in Mr. Kehrer's survey in 1993 and 1994, continued to lose ground. Its sales slipped 7.4% last year, to $651 million.

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